error in put vertical buying power calculation

[bayareacoder]

I believe the buying power (margin) requirement for a short vertical in putVertical.py, shown as:

      currentPutToSellPrice - currentPutToBuyPrice)) * self.__numContracts * 100```

is not correct. It should be just the width of the spread * 100 * number of contracts as that is the max value it could achieve if the short spread is fully in the money. So:
      ```buyingPower = (self.__putToSell.strikePrice - self.__putToBuy.strikePrice) * self.__numContracts * 100```

UPDATE: OK I guess they allow the credit received to count against the margin requirement. That could be specific to Tastytrade. Then it's correct.
https://support.tastytrade.com/support/s/solutions/articles/43000435260

[sirnfs]

I believe this is correct. Can you please check the explanation and example here: https://tastytrade.com/learn/options/short-put-vertical-spread/

On Tue, Jun 25, 2024, 6:24 AM B @.***> wrote:

I believe in putVertical.py: buyingPower = ((self.putToSell.strikePrice - self.putToBuy.strikePrice) - ( currentPutToSellPrice - currentPutToBuyPrice)) self.__numContracts 100

should be: buyingPower = ((self.putToSell.strikePrice - self.putToBuy.strikePrice) ( currentPutToSellPrice - currentPutToBuyPrice)) self.__numContracts * 100

• should be *

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[bayareacoder]

Yes it is correct as mentioned in my update. But when you do iron condors (vertical put & call spread) then it's not so simple as now the margin requirement of a put vertical depends on matching call verticals in the portfolio. Have you done code for an iron condor (i.e. matching put + call short verticals) strategy?

[sirnfs]

I don't have code for an iron condor, but here's how the buying power is calculated with Tastytrade: https://support.tastytrade.com/support/s/solutions/articles/43000435229

On Tue, Jun 25, 2024, 5:46 PM B @.***> wrote:

Yes it is correct as mentioned in my update. But when you do iron condors (vertical put & call spread) then it's not so simple as now the margin requirement of a put vertical depends on matching call verticals in the portfolio. Have you done code for an iron condor (i.e. matching put + call short verticals) strategy?

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[sirnfs]

Note that I actually checked and and confirmed this on the Tastytrade platform.

On Tue, Jun 25, 2024, 6:19 PM Michael Santoro @.***> wrote:

I don't have code for an iron condor, but here's how the buying power is calculated with Tastytrade: https://support.tastytrade.com/support/s/solutions/articles/43000435229

On Tue, Jun 25, 2024, 5:46 PM B @.***> wrote:

Yes it is correct as mentioned in my update. But when you do iron condors (vertical put & call spread) then it's not so simple as now the margin requirement of a put vertical depends on matching call verticals in the portfolio. Have you done code for an iron condor (i.e. matching put + call short verticals) strategy?

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[sirnfs]

Going to go ahead and close this issue. Thanks for reviewing the code.